(a) (1) Mortgage lending authorized by this chapter shall be for multifamily rental housing developments at risk of conversion. For the purposes of this chapter, multifamily rental housing developments at risk of conversion shall include any of the following: (A) Federally assisted housing for which the low-income use restriction may terminate or be substantially modified within four years. (B) State or locally assisted housing for which the low-income use restrictions may terminate or be substantially modified within four years. (C) Other privately owned housing serving at least 30 percent lower income tenants which is demonstrated to be at risk of converting to other residential or nonresidential use within four years resulting in the displacement of lower income tenants. (2) For the purposes of this chapter, âsubstantially modifiedâ means any change to use restrictions which would result in reducing the number of units originally required to be set aside for lower income tenants or reducing the time the units are required to be set aside for lower income tenants. (b) Mortgage lending authorized by this chapter for multifamily rental housing developments at risk of conversion shall include the following: (1) Loans for the acquisition of an existing multifamily rental housing development for a temporary period prior to and pursuant to a plan made or approved by the agency for permanent financing and any necessary rehabilitation of the multifamily rental housing development. Loans made pursuant to this paragraph shall not exceed 90 percent of the value of the property and the costs of holding the housing for a period of up to three years and shall accrue simple interest at a rate of 3 percent per annum. All principal and accrued interest shall be due and payable not later than three years from the date of the loan, or earlier upon sale, refinancing, syndication, or permanent loan closing. The board may extend the term of the loan for one additional year based on a finding that additional time is needed to secure permanent financing for the development. The loan shall be subject to a regulatory agreement with an occupancy restriction for the assisted units for 40 years. (2) Loans for acquisition or acquisition and rehabilitation secured by a lien junior to other permanent financing for a multifamily rental housing development pursuant to a plan made or approved by the agency for permanent financing and any necessary rehabilitation of the multifamily rental housing development. Loans made pursuant to this paragraph shall be made upon terms and conditions determined by the board, but in an amount which, when added to debt secured by a lien senior to the loan, does not exceed 90 percent of the value of the property or if the property is rehabilitated, 90 percent of the after rehabilitation value. The amount included in an acquisition and rehabilitation loan for rehabilitation shall not exceed $5,000 per unit. The number of assisted units shall be at least equal to the proportion of project cost financed pursuant to this chapter to total project cost. Loans made pursuant to this paragraph shall be for a term of not less than 40 years and shall bear simple interest at a rate of 3 percent per annum. The board may extend the term of the loan for an additional 10 years as long as the rental housing development is operated in a manner consistent with the regulatory agreement. The board, in its discretion, may provide for the current payment of interest or for the accrual of interest over the term of the loan. All principal and any accrued interest shall be due and payable at the end of the loan term, or earlier upon sale, refinancing or syndication of the property unless the agency determines the proceeds obtained from a refinancing or syndication are necessary to maintain the housing development in accordance with the terms and conditions of the regulatory agreement or otherwise further the purposes of the chapter. The loan shall b
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